In his latest investors note, KGI Securities analyst Ming-Chi Kuo claims that Apple will be exclusively using Intel modem inside its 2018 iPhone lineup. Apple had first started using Intel baseband inside iPhones starting with the iPhone 7 in 2016. However, the majority of baseband orders from Apple have always gone to Qualcomm, with Intel only supplying the baseband for selected iPhone models used in the United States.
Apple continued making use of Intel baseband inside the iPhone 8 and iPhone X this year despite tests claiming that the Intel model was inferior to the Qualcomm supplied modem by a significant margin.
Despite Apple making use of Intel modems inside its 2018 iPhone lineup, Kuo believes that Qualcomm can make a comeback in Apple’s supply chain in the future. There’s a possibility that Intel’s 5G chips might not be ready in time for Apple to use in future iPhones which may force the company to fall back on Qualcomm. Additionally, Apple might also start sourcing modem from Qualcomm as a concession for their ongoing patent lawsuit.
Apple will reportedly be using a faster LTE modem on the 2018 iPhone lineup with 4×4 MIMO support. This will be paired with a new antenna design for faster data transmission speeds. Back then, it was reported that Apple would still be sourcing around 30 percent of modem from Qualcomm.
The news of Intel now possibly supplying all the baseband to Apple this year is definitely not going to go down well with Qualcomm. The company is already fighting a major lawsuit against Apple, with the Cupertino company getting its other supply chain vendors to hold their royalty payments to Qualcomm. Considering just how big of a client Apple is for Qualcomm, this move will negatively affect the company’s bottom line hard this year. Samsung, another major Android OEM, already uses its own baseband in the international variant of its flagship Galaxy S devices. With Qualcomm losing out orders from major smartphones OEMs, the company might just have to reconsider its business strategy here.
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